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Incitec Pivot managing director James Fazzino is confident his mining explosives business will benefit from resources companies focus on volume growth rather than new projects.

Mr Fazzino, who unveiled a better-than-expected 23 per cent drop in first-half profit on Monday, said explosive sales volumes to the Pilbara region had increased by 5 per cent against a backdrop of mining austerity.

“We are exposed to mining volumes, not commodity prices. The deposits are getting deeper, which can actually increase explosives use. We’re not ­concerned about volumes,” he said.

Earnings across the Dyno Nobel explosives business rose 7 per cent in the half despite a deteriorating outlook for coal and iron ore, mitigating the 19 per cent drop in fertiliser earnings.

Mr Fazzino reiterated his call for Australian politicians to follow the United States and create jobs through cheap gas as the explosives and fertiliser maker reported net profit after tax (NPAT) of $110.2 million for the six months to 31 March 2013, $33 million less than its first-half in 2012.

“Australia should learn from the US. The US policy keeps gas onshore to ­create value and jobs rather than focusing on exports. Absolutely, gas should be reserved. The US is going to create 3 million manufacturing jobs off the back of its shale boom.”

Incitec’s BEx [business excellence] initiative delivered $13 million in ­savings after $7 million of investment.

Mr Fazzino expects $30 million in efficiency gains will be extracted once the full $15 million is spent.

RBS Morgans analyst Belinda Moore said the stronger-than-expected result was solid, given difficult conditions.

“It was a decent beat for us.

“The key negative from the result is the lower guidance for Moranbah, which was below what most people would have expected. In terms of the BEx program, they are probably exceeding expectations.”

Production at the $1 billion Moranbah ammonium nitrate plant in Queensland started last year. On Monday, 2013 production guidance from Moranbah was downgraded by 50,000 tonnes to 200,000 tonnes, while estimated incremental earnings before interest and tax were revised down from $75 million to $40 million.

Mr Fazzino admitted the plant had some issues. However, he is confident it will deliver acceptable returns.

Deutsche Bank analyst Mark Wilson said the profit result was actually ­negative because earnings were boosted by $27 million in capitalised interest, while operating earnings were $19 million below the bank forecast.

The combined weight of declining fertiliser prices and the high dollar drove earnings in the fertiliser segment down 19 per cent in the period, although the group remains committed to the fertiliser business.

“Here in Australia it’s tough to be a manufacturing group but despite the challenges, IPF delivered earnings of about $50 million,” Mr Fazzino said.

Incitec shares rose 3.5 per cent to $2.93 on Monday.The group declared a 75 per cent franked interim dividend of 3.4¢ per share, payable on July 2, 2013, representing a payout ratio of 50 per cent.